In mid-2012, the City Council took action to present two ballot measures to the City’s voters on the November 6, 2012 municipal election ballot. The two ballot measures were later designated as Propositions N and P, respectively. Propostion N proposed various changes to the City’s General Plan. Proposition P proposed the adoption of a city charter.

On October 17, 2012, Item 16A was added to the October 17, 2012 City Council meeting agenda. Item 16A consisted of a request by the City Manager for the appropriation of up to $20,000 for “Educational and Information Publications on Upcoming City Ballot Measures.” The accompanying staff report stated that the requested educational and information publications would be modeled on the material previously provided as a utility bill insert. The City Council unanimously approved the expenditure for “Educational and Informational Publications” requested in Item 16A.

A resident and taxpayer of the city filed a lawsuit alleging that the mailer that was subsequently prepared and distributed to City residents exceed the scope of the communications authorized on October 17, 2012. More specifically, the plaintiff alleges that the mailer was not merely “informational” and instead constituted “campaign activity” that could not lawfully be paid for with City funds. The lawsuit alleges that the City and one or more City officers and/or employees violated constitutional and statutory law in connection with the mailer, including by failing to file various documents required by the Political Reform Act.

The City believes there is a possibility that a court might agree that state law was violated in connection with the preparation and distribution of the mailer, and that it is in the best interests of the City to enter into a settlement agreement to resolve the lawsuit. Accordingly, the City has agreed to a settlement that acknowledges the possibility that contrary to the intent of the City Council, a court could ultimately determine that the mailer was campaign activity. The has agreed to adopt rules and guidelines for the purpose of preventing City funds from being used in the future to pay for activities that could constitute campaign activity, and under the settlement, the City will satisfy any necessary disclosure obligations under the Political Reform Act. Lastly, the City agrees to reimburse plaintiff for costs incurred in enforcing this important public interest. The plaintiff has agreed to dismiss his lawsuit after the City takes these actions.